AI Takes Over: Tech Hiring Plummets 8% as Companies Replace Human Roles with Automation

Tech Hiring Takes a Hit as AI Replaces Headcount

Tech hiring has taken a significant hit as companies are shedding staff, with artificial intelligence taking over roles that humans previously handled. According to staffing firm Xpheno, active openings have fallen 8% to 110,000 this month from 119,000 in March.

The Decline in Tech's Hiring Share

India’s tech sector had 256,000 active job openings in April 2022, thanks to the post-pandemic surge in IT services, and accounted for 83% of all hiring in the country. However, tech’s share of total hiring has now slumped to 49%, erasing three months of gains. Recruitment has been sluggish for four consecutive quarters.

Industry Insights on the Slowdown

Neeti Sharma, CEO of TeamLease Digital, explains: "Right now, the slowdown is much higher in IT services companies, where hiring has reduced to only essential roles or newer skill sets while focusing on AI-led efficiency. On the other hand, GCCs (global capability centres) continue to hire but much more selectively, slowing down only for low-value or support roles while continuing to invest in high-skill, strategic and digital capabilities."

Sanketh Chengappa, director at Adecco India, adds: "Global clients, especially from the US and Europe, are deferring hiring decisions rather than cancelling them outright. The slowdown is now being driven more by internal cost control. Organisations are prioritising productivity, leveraging AI to reduce incremental hiring, and focusing on margin expansion. This is a structural reset rather than a cyclical dip."

Segment-Wise Impact

The Xpheno data show the slowdown is spread across segments:

• GCC openings fell 21% month-on-month
• IT services dropped 7% sequentially and from a year ago
• Consulting roles fell 33%
• Mid-junior openings dropped 25% from the month before

Sharma notes: "Delay in hiring decisions is much more in the IT services sector, primarily due to budgets being rechecked and fewer new projects, while in GCCs, decisions are mostly delayed due to their selection cycles, taking longer to find the right talent, especially for niche and high-end skill roles."

Parallel Trends in GCCs

Pareekh Jain, CEO of EIIRTrend, highlights two trends operating in parallel: "Larger GCCs are slowing hiring due to AI and macro conditions, while new GCCs continue to come up." He points out that only around 1,700 of a potential 5,000 global companies have set up GCCs in India so far, and new entrants could offset the slowdown from larger, established centres. "Overall, GCC hiring should grow but may see variation in month-on-month trends depending on which segment is more prominent."

Workforce Restructuring

The shift is also visible in the way companies are structuring their workforce. Full-time roles, which account for 77% of all openings, fell 3% while contract openings dropped 17%. Sharma notes: "Short-term hiring is more prominent in IT services companies as they want to keep their hiring decisions flexible while being able to get the right talent at the right time."

Chengappa summarises: "What we are witnessing is not a collapse in tech hiring but a structural shift toward precision hiring. Companies are prioritising skills, productivity, and flexibility over scale."

Geographic Shifts in Hiring

Geographically, the pressure is concentrated in the big cities. Metro hiring fell 29% from a year ago while tier two and tier three locations grew 10% over the same period, underlining that hiring is slowly moving beyond the traditional tech hubs of Bengaluru, Hyderabad and Delhi NCR.